PLANNING

Coordinating function of engineering management

THE NATURE OF PLANNING
• There are many instances when managers are
overwhelmed by various activities which at times becloud
his judgment. This must be expected since anybody who
is confronted by several situations happening
simultaneously will loose sight of the more important
concerns. To minimize mistakes in decision making,
planning is undertaken.
• A plan which is the output of planning, provides a
methodical way of achieving desired results. Without the
plan, some minor tasks maybe afforded major attention
which may later on, hinder accomplishment of objectives.
Example
• The management of an engineering firm was able to
identify the need to hire additional three employees. The
manager preceded to invite applicants, screen them, and
finally hired three of them. When the hiring expense
report was analyzed, it involved more than the double
amount spent by other firms in hiring the same number of
people.
• When an inquiry was made, it was found out that the
manager committed some errors of judgment. For
instance, he used an expensive advertising layout in a
newspaper when a single message will do.
• Also, it was found out that the absence of a hiring plan
contribute to the high cost of hiring
PLANNING DEFINED
• Planning refers to the management function that involves
anticipating future trends and determining the best
strategies and tactics to achieve organizational objectives.
• It is also the selection and sequential ordering of task
required to achieve an organization goal.
• It is deciding what will be done, who will do it, where,
when, and how will it be done, and the standards to which
it will be done.
PLANNING AT VARIOUS
MANAGEMENT LEVEL
Since engineer managers could be occupying
positions in any of the various management levels, it will be
useful of them to know some aspects of planning
undertaken at different management levels. Planning
activities undertaken at various level are as follows:

• 1. Top management level – Strategic Planning

• 2. Middle management level – intermediate planning
• 3. Lower management level – operational planning
Strategic planning
• The term strategic planning refers to the process of
determining the major goals of the organization and the
policies and strategies for obtaining and using resources
to achieve those goals.
• In strategic planning, the whole company is considered,
specifically its objectives and current resources.
• The output of strategic planning is the strategic plan
which spells out “the decision about long range goals and
the course of action to achieve these goals.”
Intermediate Planning
• Intermediate planning refers to the process of determining
the contributions that subunits can make with allocated
resources.
• The intermediate plan is designed to support the strategic
plan.
Operational Planning
• Operational planning refers to the process of determining
how specific task can be best accomplished on time with
available resources.
The organization and types of planning
undertaken
1. Strategic Planning – president, general manager
2. Intermediate planning – marketing manager, production
manager, finance manager, personnel manager
3. Operational Planning – industrial engineering manager,
factory manager, quality control manager
THE PLANNING PROCESS
• The process of planning consists of various steps
depending on the management level that performs the
planning task. Generally, planning involves the following:

1. Setting organizational, divisional, or unit goals

2. Developing strategies or tactics to reach those goals
3. Determining resources needed and 4. Setting standard
Setting Organizational, Divisional, or Unit
Goals
• The first task of engineer manager is to provide a sense of
direction to his firm, to his division, or to his unit. The
setting of goals provide an answer to the said concern. If
everybody in the firm is aware of the goals, there is a big
chance that everybody will contribute his share in the
realization of such goals.
Developing Strategies or Tactics to Reach
Goals
• After determining the goals, the next task is to devise
some measures to realize them. The ways to realize the
goals are called strategies and these will be concern of top
management. A strategy may be defined as a course of
action aimed to ensuring that the organization will
achieve its objectives. A tactic is a short term action taken
by management to adjust to negative internal or external
influences.
Determining the sources needed
• When particular sets of strategies or tactics have been
devised, the engineer manager will, then, determine the
human and non human resources required by such
strategies or tactics.
• The quality and quantity of resources needed must be
correctly determined. Too much resources in terms of
either quality or quantity will be wasteful.
Setting Standards
• When actual performance, corrections may be made or
reinforcements given.
• A standard may be defined as a quantitative or qualitative
measuring device designed to help monitor the
performance of people, capital goods, or processes.
TYPES OF PLANS
Functional Area Plans
1. Marketing plan – this is the written document or
blueprint in implementing and controlling the organization’s
marketing activities related to particular marketing strategy.
2. Production plan – this is a written document that states
the quantity of output a company must produce in broad
terms and by product family.
3. Financial plan – it is a document that summarizes the
current financial situation of the firm, analyzes financial
needs, and recommends a direction for financial activities.
4. Human resource management plan – indicates the
human resource needs of a company detailed in terms of
quantity and quality and based on the requirements of the
company’s strategic plan.
• TYPES OF PLAN Plan with Time Horizon 1. Short range
plans – plans intended to cover a period of less than one
year. 2. Long range plans – plans covering a time span of
more than one year
TYPES OF PLAN
Plans According to Frequency of Use
1. Standing Plans –These are plans that are used again and
again, and they focus on managerial situations that recur
repeatedly.
• Policies – broad guidelines to aid manager’s at every level in
making decisions
• Procedures – describe exact series of actions to be taken in a
given situation
• Rules – statements that either require or forbid a certain action
2. Single Use Plans – implement courses of action that are
relatively unique
• Budget – plan which sets forth the projected expenditure for a
certain activity and explains where the required funds will
come from.
• Program – designed to coordinate large set of activities
• Project – limited in scope than a program and is prepared to
support a program
Parts of the Various Functional Area
Plans
• The engineer manager may be familiar with
engineering plans, knowing the details from the
beginning to end. However, the ever present
possibility of moving from one management
level to the next and from one functional area to
another presses the engineer manager to be
familiar as well with the other functional area
plans.
The contents of a marketing plan
• The following must be contained in the marketing plan
1. The executive summary - overall
2. Table of contents
3. Situational analysis and target market
4. Marketing objectives and goals
5. Marketing strategies
6. Marketing tactics
7. Schedules and budgets
8. Financial data and control
CONTENTS OF THE PRODUCTION
PLAN
The production plan must contain the following

1. The amount of capacity the company must have

2. 2. How many employees are required
3. 3. How many materials must be purchased
CONTENTS OF THE FINANCIAL
PLAN
1. An analysis of the firm’s current financial condition as
indicated by an analysis of the most recent statements
2. Sales forecast
3. Capital budget
4. Cash budget
5. A set of pro forma (or projected) financial statements
6. External financing plan
CONTENTS OF HUMAN
RESOURCE PLAN
1. Company or corporate mission
2. Objectives and goals
3. Strategies

• Company of corporate mission refers to the strategic

statement that identifies why an organization exists, its
philosophy of management, and its purpose as
distinguished from other similar organizations in terms of
products, services, and markets.
MAKING PLANNING EFFECTIVE
Planning is done so that some desired results may be achieved. At
times, however, failure in planning occurs.
Planning may be made successful if the following are observed:
1. Recognize the planning barriers
2. Use of aids to planning
The planning Barriers are:
1. manager’s inability to plan
2. Improper planning process
3. Lack of commitment to the planning process
4. Improper information
5. Focusing on the present at the expense of the future
6. Too much reliance on the planning department
7. Concentrating only on the controllable variable
“MANAGERS WHO PLAN ARE
AFFORDED WITH THE
OPPORTUNITY TO
CAREFULLY ANALYZE
SITUATIONS WHICH
DIRECTLY CONTRIBUTE TO
EFFECTIVE DECISION
MAKING”
SALAMAT